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Romania: New regulations aim to discipline the construction sector and reduce bureaucracy

In an effort to reduce the bureaucracy of the construction permitting process and support both investors and local authorities, the Romanian parliament enacted Law no. 197/2016, which came into effect on 4 November 2016 and the government issued Government Emergency Ordinance no. 100/2016, which came into effect on 27 December 2016.

A number of useful amendments from these new regulations are expected to overcome the delays and hindrances that have plagued the construction permitting process in Romania. The most notable changes include:

• In urgent cases, upon justified request, construction permits can be issued within 15 days, instead of the usual 30 day term.

• Before the completion of construction works, investors can now request a certificate attesting the stage of execution and current legal status of the construction. The certificate can be used to register the construction with the Land Registry, thus correcting a major shortcoming of the previous provisions which did not allow for the registration of unfinished constructions. This change will make it easier for investors to sell a partially constructed building.

• Zoning plans (PUZ) aimed to change the urbanism regime for only one land plot located within city borders will be allowed if the land plot is surrounded by at least three public roads or other natural environment elements. This is intended to restrain the attempts to pass PUZs for individual small plots and rather allow it only if documented for larger areas.

• Approval of PUZs for land outside of city borders has been limited to parcels of at least 5,000 sq. m. which are already adjacent to land within city borders.

• Fines for violations of the construction permitting law were significantly increased.

• Public authorities have until December 2019to procure the necessary capabilities for receiving documentation for the issuance of planning certificates and building permits online.

• To fight corruption, guidelines for planning and land-use planning policies must be made public knowledge.

• To accelerate investment, the concept of “tacit consent” has been eliminated. Now, if the issuers of building permits and underlying endorsements do not respond by the legal deadlines, the State Inspectorate in Construction has the authority to fine them. Furthermore, construction permits will now be valid for up to 24 months, instead of 12 months.

• The State Inspectorate in Construction now has the capacity to pursue proceedings against illegal planning or construction permits in court. Previously, only the prefect had such authority, which led to abuses. Moreover, the Inspectorate is obliged to stop the execution of construction work that does not meet legal requirements.

The improvements are part of a broader legislative package launched in 2016, which aims to increase the quality of the construction market in Romania. We expect further changes, at least to Government Emergency Ordinance no. 100/2016 upon its approval by the recently elected parliament.

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